United States District Court Rejects Colorado Equal Pay Act Injunction | Husch Blackwell LLP
Last week, in the case of Rocky Mountain Association of Recruiters v. Moss, Case No.1: 20-cv-03819 (USDC Colo.), U.S. District Judge William J. Martinez denied a plaintiff’s request for a preliminary injunction to block parts of Colorado’s law on equal pay for equal work (EPEWA). The EPEWA, which came into effect this year, aims to close the gender pay gap in Colorado by prohibiting employers from paying an employee of one sex less than the other sex for a substantially similar work (part 1) and by requiring employers to comply with strict rules for posting job vacancies and pay transparency (part 2).
The applicant’s constitutional challenge
The above-mentioned lawsuit challenges EPEWA’s promotion and compensation requirements on constitutional grounds. Under the promotion posting requirement, employers must notify current employees of all promotion opportunities, with some exceptions. The statutory compensation posting requirement requires employers to include in every job posting:
- the expected salary or range for the position;
- a description of any bonuses, commissions or other forms of compensation offered; and
- a description of all benefits available to employees.
The applicant specifically claims that these requirements violate the dormant trade clause and the First Amendment protections of trade speech. Based on these allegations, the plaintiff sued Scott Moss in his official capacity as director of the Division of Labor Standards and Statistics of the Colorado Department of Labor and Employment (Division) and sought a preliminary injunction prohibiting the Division to apply both provisions.
District court rejects claimant
In dismissing the claim, Judge Martinez found that the claimant had not provided sufficient evidence to show a “substantial likelihood of success on the merits” for either claim, which was required in a case. request for a preliminary injunction.
Under the Dormant Commerce Clause, states are prohibited from passing laws that discriminate against interstate commerce or unduly overburden interstate commerce over local state benefits. In seeking a preliminary injunction, the plaintiff alleged that the display, promotion and compensation requirements unduly weighed on interstate commerce relative to the state’s claimed public benefit of improving gender pay equity. Specifically, he argued that there was no evidence that the posting requirements would reduce the wage gap and that the potential benefits were outweighed by the burdens and costs of the requirements for employers doing interstate hires. .
Judge Martinez disagreed, finding that the plaintiff’s primary evidence regarding the interstate charges – the employer’s costs inside Colorado – was insufficient at this stage of the case to show “the relative magnitude of local benefits, compared to the burdens on interstate commerce ”created by EPEWA and its regulations.
Likewise, Judge Martinez dismissed the plaintiff’s claim under the First Amendment, agreeing with the division that the posting requirements are reasonably related to the government’s interest in reducing the gender wage gap and that requirements were not particularly onerous to cool down commercial discourse. He said that while the Division did not produce “empirical evidence” that the law will have a demonstrable effect on the gender wage gap, such certainty was not required to justify the restrictions. He also noted that the posting requirements only obligate the disclosure of factual information and that employers are always free to include additional information that may serve specific candidates or minimize confusion.
What does this mean to you
While the outcome of this district court case failed to block the implementation or enforcement of EPEWA, it left the door open – closely – to future grievances. The order says the plaintiff may be able to strengthen its request for a dormant trade clause after gathering additional evidence on the interstate impacts of the publication requirements.
We will continue to monitor this case and provide updates as it evolves. In the meantime, EPEWA’s promotion and compensation posting requirements remain in place and employers must ensure their hiring policies remain compliant. Additional information on EPEWA and its implementing regulations can be found at the links provided.